Packaging Supply Chain Network Status

Lumi is tracking operational data from thousands of factories to provide up-to-date information about supply chain disruptions, including COVID-19, holidays, weather delays, tariff changes, and more.

Any other information you'd like to see? Tweet us @Lumi. Manufacturers, contact us at tracker@lumi.com

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Electricity rationing expected to reduce capacity in China

Power outages and electricity rationing in China is expected to reduce capacity, increase lead times, and increase costs from factories in China.

Manufacturers in China have reported that electricity may be rationed in the coming months. In some regions factories have been temporarily closed while in others they are subject to a 50% rationing of supply.

This rationing is driven by a combination of coal shortages and the enforcing of environmental targets.

In practice this will mean higher prices and longer lead times. This will add to existing delays seen at Asian and US ports although that is expected to improve once China returns from the Golden Week holiday.

If you need to order from China in the next 3 months, make sure you discuss this with your supplier so that you have a clear understanding of the timelines. You may also want to explore US manufacturing alternatives as there is no guarantee that the volatility won’t continue through 2022. 

Over 700 US factories have joined Lumi in the last 6 months with wide availability across products. Explore suppliers in the United States on Lumi.

Price increase for paper-based products

Manufacturers on Lumi are reporting that North American containerboard mills have implemented yet another $50 per ton increase on linerboard and $60 on medium. This is the third price increase of this kind since November 2020. Visit the Lumi Corrugated Tracker for live updates.

Historic demand fueled by consumer spending and a shift to ecommerce home deliveries is behind the increase. Paper supply remains tight, there is a shortage in labor and other input costs, such as freight, continue to rise.

Price increases vary by manufacturer, but range between 7 to 12%. Please message the manufacturers you work with to understand how the price increase impacts your products.

Port congestion is causing delays

Shipping times from Asia to the US are continuing to rise as we approach the holiday season. Ports across the US and China are struggling to meet the current capacity needs, which is leading to delays in departure and arrival for goods. The Los Angeles—Long Beach hub is the most severely affected with more than 50 ships unable to dock. Other major US ports have seen backlogs over the last few months. 

You can expect to see a 2-4 week delay in ocean freight shipments. If your goods have not left Asia yet, you may want to consider partial air freight.

Golden Week closures in China

China will celebrate Golden Week from 1-7 October and the major ports will be closed.

In Q3 2021 the cost of paper-based products will increase, likely between 7-11%.

Four of North America's largest six integrated container board producers announced price increases in June. Increases will roll out from mid-July through September.

Materials impacted: Virgin corrugated medium, liner board, and SBS will rise $50-70/ton effective mid-July. Pricing for recycled fiber is also expected in increase for the second month in a row starting mid-July.

Products impacted: All paper products produced in the US, including boxes, paper collateral, paper mailers, publications, paper stickers and labels, paper tape, paper tubes, and paper void fill.

What's driving the increase? The latest industry wide increases on all fiber substrates are driven by increasing demand and raw material costs.

More to come: Delays in the supply chain have created even more strain, reducing material availability. This may may stretch lead times from material manufacturers to paper manufacturers, and the delays could trickle down to customers.

Expected communication delays for Dragon Boat Festival, June 12-14

Manufacturers in China are preparing for the annual Dragon Boat Festival, which will last from June 12th to June 14th. Communications may be delayed until they return to work on June 15th.

Although not as long as the Lunar New Year celebration, the Dragon Boat Festival is a widespread holiday in nearly all of Asia. Plan on minor disruptions to production and slower responses from factories, freight forwarders, customs brokers and anyone else directly connected to the region.

The Dragon Boat Festival has been celebrated for thousands of years and its traditions are associated with driving off evil spirits, disease, and bad luck.

Tape and adhesive prices continue to rise

Customers may see continued price increases across packaging going into holiday peak season, particularly tape and adhesives. Both the COVID-related ecommerce spike and constricted supply chains have driven up the price of all major feedstock and ancillary components. These factors have put tape producers in a position to dramatically raise prices.

One cause of the constricted supply chain is extreme weather, including February's polar vortex in Texas and Louisiana. This continues to drive up freight costs and disrupt the petrochemical supply chain, straining the supply of several raw material components used in tape. 

Year over year, there have been significant price increases on raw material and ancillary cost components as the result of a number of compounded factors. 

Raw material costs (Jun 2020 - May 2021)

  • SBS - 4.9%
  • CCNB - 8.2%
  • BCHIP - 8.5%
  • PVC - 45.3%
  • PET - 28.6 %

Other costs (Jun 2020 - May 2021)

  • Freight - 50-60%
  • Pallets - 21.5%
  • Corrugated - 10-15%
  • Ink - 6-8%
  • AQ coatings - 9%
  • Adhesives - 14%
  • Die board & rule - 12.5%
  • Outside sheeting - 12.5%
  • Stretch file - 20%

We recommend that customers place orders as soon as possible as we expect this trend to continue throughout summer and fall.

Extreme delays ahead for US imports

Trans-Pacific freight delays and extreme port congestion are continuing to delay imports, and may worsen in the coming months as import volumes continue to grow. We will also see fallout from the Suez Canal accident, as resulting congestion at European ports will limit the number of empty containers transported back to Asia. This in turn will reduce the number of available containers available for China to US shipments. Importers should also prepare for higher spot prices as the gap between supply and demand widens.

Lumi recommends placing orders as far in advance as possible and to consider budgeting for air freight in mission-critical cases. 

Adhesive shortage impacting some lead times

An adhesive shortage is occurring nationally due to the historic winter storms last month in Texas and across the Gulf Coast region. Adhesives are an important component in numerous packaging products including tape, folding cartons, and corrugated containers. Key raw materials and intermediates used to manufacture adhesives are byproducts of the petrochemical industry, which was hit hard by forced operational shut-downs due to the cold weather. The storms exacerbated existing issues in the adhesives supply chain, including already low inventories due to increased ecommerce demand, and limited availability of freight capacities.

While most petrochemical operations have restarted, US American Adhesive and Sealant Council (ASC) indicated US supply chains will take weeks or even months to recover after such a major disruption.

We are monitoring the situation and will contact those directly affected by the shortage. We advise placing all orders as soon as possible to help mitigate any delays. 

Price increase for corrugated products in North America

Several major North American producers of containerboard have recently increased linerboard prices by $50-$70/ton. Though not universal, this recent round of increases is already being adopted by several integrated and independent corrugated manufacturers.

Learn more about corrugate price changes using the Lumi Corrugated Tracker.

While corrugated increases are expected a couple times a year, this situation is slightly abnormal because the increase is being driven by tight supply and sustained increase in demand, which has not let up despite the holiday season coming to an end. These issues are compounded by the rise in input costs and unpredictable shortages in labor due to COVID-19.

Please reach out to your Customer Success Manager to understand how the price increase impacts your products.

Expected production delays for Lunar New Year

Factories in Asia will be closed February 10-20 in observance of Lunar New Year (February 12). Some factories allow workers to take more than the allotted time off, so we like to plan for reduced production runs for the remainder of the month.

Before and after the weeks-long holiday, factories will experience congestion as they prepare for the close, and then catch up on the backlog. This will result in longer than expected lead times in early March, but production will level out in mid to late March. Please note, the delays in production also have an effect on logistics and congestion at port. All cargo should be planned in advance. Bookings within the Lumi freight team will begin March 15 and proceed as normal following that start date.

To avoid production delays, if you are ordering from factories in Asia and need to receive items before the end of March, we advise placing your orders as soon as possible.